Newcrest Mining will spend $93 million this quarter to expand its Telfer gold mine in Western Australia, after the state government was last week forced to abandon its planned gold royalty increase.
Newcrest said the investment would be used to expand the West Dome open pit and improve the operation’s narrow margins over time.
It is expected to extend the life of Telfer’s open pit by about four years, to about 2023.
Newcrest was one of a number of WA-focused gold miners to have publicly voiced opposition to the state government’s now-cancelled gold royalty increase, arguing that it would have all but stripped its profit from Telfer.
The plan was shut down after the state opposition said it would not support the tax hike.
“We are pleased and relieved that the WA parliament voted last week not to proceed with the planned increase in the gold royalty rate,” Newcrest chief executive Sandeep Biswas said today.
“This decision, and the positive signal it sent about the state’s investment potential, has enabled us to proceed confidently with this investment to extend Telfer’s mine life.
“It means jobs, ongoing royalties, a substantial flow of economic activity, and ongoing community services and employment opportunities in one of the most remote parts of Australia.”
Local mining services business Macmahon Holdings reported today that its operations at Telfer were continuing to improve, with the Perth company expecting to break-even at the mine for FY18.
It came as the company announced its chief financial officer, Jose Martins, had tendered his resignation to take up a senior role with an undisclosed private resources company.
“Macmahon is now in the best shape it has been in several years, with a strong balance sheet, improved market conditions and a supportive share register, so I think the timing is right for me to move on to pursue other mining development opportunities,” Mr Martins said.
He will remain in his role until early next year. His successor is yet to be chosen.
Newcrest shares were 0.1 per cent lower to $21.95 each at 10:30am, while Macmahon shares were 2.1 per cent lower to 23 cents each.
